During the current year, Compton Crate Corporation purchased all of the outstanding common stock of Little Lacy Ltd. (LLL), paying $60 million in cash. Compton recorded the assets acquired as follows:
The book value of LLL's assets and owners' equity before the acquisition were $50 million and $30 million, respectively.
Required: Compute the fair value of LLL's liabilities that Compton assumed in the acquisition.
$$\begin{array} { l l }
\text { Accounts receivable } & \$ 5,500,000 \
\text { Inventory } & 18,000,000 \
\text { Property, plant, and equipment } & 45,500,000 \
\text { Goodwill } & 22,000,000
\end{array}$$

Question

During the current year, Compton Crate Corporation purchased all of the outstanding common stock of Little Lacy Ltd. (LLL), paying $60 million in cash. Compton recorded the assets acquired as follows:
The book value of LLL's assets and owners' equity before the acquisition were $50 million and $30 million, respectively.
Required: Compute the fair value of LLL's liabilities that Compton assumed in the acquisition.
 $$\begin{array} { l l } 
\text { Accounts receivable } & \$ 5,500,000 \
\text { Inventory } & 18,000,000 \
\text { Property, plant, and equipment } & 45,500,000 \
\text { Goodwill } & 22,000,000
\end{array}$$

Quizplus · Accepted Answer

The Answer of During the current year, Compton Crate Corporation purchased all of the outstanding common stock of Little Lacy Ltd. (LLL), paying $60 million in cash. Compton recorded the assets acquired as follows:
The book value of LLL's assets and owners' equity before the acquisition were $50 million and $30 million, respectively.
Required: Compute the fair value of LLL's liabilities that Compton assumed in the acquisition.
 $$\begin{array} { l l } 
\text { Accounts receivable } & \$ 5,500,000 \
\text { Inventory } & 18,000,000 \
\text { Property, plant, and equipment } & 45,500,000 \
\text { Goodwill } & 22,000,000
\end{array}$$

During the Current Year, Compton Crate Corporation Purchased All of the Outstanding